Home insurance: guarantee against underinsurance?
If you have bought a house and are going to take out various insurances for your property, the building insurance is indispensable in this list. With the building insurance you insure against damage to your home and the accompanying immovable goods (goods that cannot be moved, i.e. are connected to the ground). It is important to take out buildings insurance so that your home is insured for its actual value. This will prevent your home from being underinsured. How can you prevent this? Read about this topic, the building insurance in general and more in this article.
What are the different coverages of a building insurance?
The building insurance usually includes four different types of coverage:
- The fire cover, this is the least comprehensive insurance;
- Comprehensive cover (UGV);
- The Comprehensive Risk Coverage + (UGV+);
- All-risk cover, the most comprehensive cover.
These coverages pay for damage that can occur as a result of, for example: fire, water damage, storm (from wind force 7), lightning strike, burglary and vandalism.
When are you underinsured in a building insurance?
You are underinsured if the insured amount does not correspond to the reinstatement value of your home. If you are underinsured, you will also receive less in the event of damage. You will only be paid for the damage that is in proportion to the premium paid. Most insurers offer a guarantee against underinsurance, but it is always a good idea to check with your insurer. Reading the policy conditions (in advance) remains very important in this respect.
Suppose you have a building insurance for € 200,000 and the reinstatement value is € 400,000, then you are insured for 50% of the reinstatement value. In case of damage, you will only receive 50% of the damage amount, regardless of the damage amount.
How can you prevent underinsurance of a building insurance?
In order to calculate the value of your property, the reinstatement value meter is often used. If you fill in the reinstatement value meter correctly and completely, you are insured against underinsurance for the next five years (provided that there are no changes in your situation). By means of a questionnaire in combination with your family situation, income, age and the size of your home, your insurer can make a good estimate of the value of your home. If, in the event of a claim, the reinstatement value is underestimated, the insurer will take care of the underinsurance. The most important thing for you is to fill in the reinstatement value meter correctly and truthfully.
It is wise to fill in the reinstatement value meter every five years. The insurer gives a five-year guarantee on the reinstatement value. In those five years a lot can change in your house. For example, if you have placed a dormer window or extended your home, the reinstatement value of your home will also change.
What does the building insurance exclude?
Insurers exclude disasters (catastrophe risks) from coverage. Also intent and recklessness are (logically) excluded from coverage. In this case, recklessness refers to neglecting maintenance on the house. If a pipe needs replacing and you fail to repair it, the insurer will not pay for a leak in this pipe.
Get your home insurance through Alpina: simple and affordable
Are you considering taking out building insurance? Then take it out now through Alpina! We have the right coverage for every situation. We offer competitive premiums. Do you have any doubts or questions about our building insurance? Feel free to contact our customer service. They are happy to answer all your questions.
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